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China allows import of UK dairy products made with milk from third countries

UK has reached an agreement with China which would allow the import of UK dairy products made with milk from third countries. The agreement is estimated to be worth £240 million over 5 years to the UK.

With demand for most dairy categories growing by more than 20% each year in China, it is one of the country’s fastest growing areas of food demand. The UK exported over £96 million of dairy products to China in 2017, and there has been significant interest in the market.

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Increased demand for imported food in China

Chinese consumers’ demand for imported food has been growing steadily as the standard of living in China improves, according to a statement from the General Administration of Customs.

China’s total food imports amounted to $58.28 billion last year, up 25 per cent year-on-year, while the annual average growth rate over the previous five years was 5.7 per cent, data from the administration showed.

The European Union remained China’s largest supplier of food, followed by the United States, New Zealand, Indonesia and Canada. Meat, oil, dairy, and seafood were among the most popular food imports in China.

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US Cheesemakers Hit by Tariff Dispute

Nearly 635 million kilograms of American cheese are in cold storage in the United States. That’s roughly 1.8 kilos of cheese for every American, the highest amount since record-keeping began in 1917.

And that amount could go higher as the two main US dairy states – California and Wisconsin – deal with the impact of retaliatory tariffs on dairy products from Mexico and China.

On 5 July, Mexico and China put tariffs on $986 million worth of US dairy exports-$408 million worth of cheese to China and $578 million worth of dairy products to Mexico-as retaliation for the Trump administration’s tariffs on imports of steel and aluminum. US dairy exports totaled $5.5 billion last year, including $1.3 billion to Mexico alone, according to the US Agriculture Department.

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China Aims to Improve Dairy Industry

By 2020, the country should have achieved substantial results in the supply-side structural reform of the dairy industry and made marked progress in modernizing the sector, according to guidelines released by the General Office of the State Council.

Milk self-sufficiency should be maintained above 70 per cent, according to the guidelines.

By 2025, the dairy industry should have been ”invigorated in an all-round manner,” with milk supplies, dairy processing and quality, and industrial competitiveness at world-leading levels.

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Valio China establishes the new business units of Retail and Food Service

Valio has held an unveiling ceremony for its China head office in Shanghai. The newly established head office will focus on serving the Chinese market. Besides the Ingredient business units, Valio China has also established the new business units of Retail and Food Service.

During the 30+ years since entering the Chinese market in 1986, Valio has witnessed the high-speed growth of the Chinese economy and has worked with partners to drive the improvement of China’s dairy industry. Shanghai’s favourable location, the capability of global resource allocation and the economic concentration of headquarters can help Valio build its global sales, marketing and service networks, and reinforce its overall competitiveness and influence both in the Chinese market and globally.

Valio’s connection with China dates back to 1986 when Valio collaborated with the Ministry of Agriculture of China to help develop China’s dairy industry by providing milk production knowledge training in Finland and Beijing. Valio DEMI™ demineralized whey powders entered the China market in 1990. Thanks to Valio’s demineralization process and the pure quality from Finland, the product was widely used to produce infant formulas as well as chocolates and ice creams. Since then, Valio has been driving its growth in China by establishing a sales, marketing and service system to provide professional and innovative solutions for the premium dairy ingredients market in addition to demineralized whey powders and skimmed milk powders. Furthermore, Valio opened flagship stores on e-commerce platforms, such as JD.com and Tmall.com in 2017 to provide consumers with high-quality enjoyment from Finland.

Chinese dairy market to grow by 6.6% CAGR until 2022 – research

The Chinese dairy market is forecasted to grow by 6.6% CAGR until 2022 with consistent sales increases predicted for yogurt and cheese, according to new research from Mintel.

Since 2014 yogurt has posted an annual retail sales growth of over 20% in China, and between 2015 and 2017 cheese saw a growth rate of between 15% and 25%.

The news follows research published last year which predicts that China will overtake the US as the world’s largest dairy market by 2022.

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FrieslandCampina invests €100 million in China

Dutch global dairy giant Royal FrieslandCampina plans to invest €100 million in the China market this year, its CEO Hein Schumacher said in Beijing.

The investment will be used to expand the production and sales channels of Friso, the company’s high-end infant and toddler formula brand, and further expand its sales in smaller Chinese cities, as it projected that about 50 per cent of the future growth in China will come from third to sixth-tier cities, according to the company.

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China Unilaterally Lowers Cheese Tariffs

Effective Dec. 1, 2017, China is unilaterally lowering its cheese tariffs from 12 percent to 8 percent. The reduction is part of a broader package of tariff cuts on food and consumer goods China announced last week to bolster consumer choice. Cheese was included among those products.

Over the last decade, China’s cheese imports soared more than seven-fold to nearly 100,000 metric tons. Already a top-10 cheese buyer, it is on pace to become the largest cheese importer in the world in the coming years.

Alibaba brings Italian milk to the Chinese market 

Centrale del Latte d’Italia has entered into a strategic partnership with the Alibaba Group, global leader in online and mobile sales, to sell long-life (UHT) whole milk to the Chinese market. 

Central del Latte d’Italia (CLI) products will be sold through Tmall, Alibaba Group’s largest Chinese business to consumer e-commerce platform, which will ensure access to a potential market of over 460 million active consumers annually. Tmall’s Chinese consumers will be able to purchase 100% Italian long-life milk (UHT milk with a shelf life of 300 days), under the Mukki brand.

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China will overtake the US as largest dairy market by 2022

New analysis from Euromonitor International suggests that China will replace the US as the world’s largest dairy market by 2022 as consumer demand for dairy grows in China, driven by an expanding appetite for yogurt, while US consumers become more wary of milk and flavoured milk drinks which they are perceiving to be unhealthy due to their high sugar content.

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